3 Significant Points Why Accountants And CPA's Need To Turn Over Delinquent Customers To A Debt Collection Agency

Accounting firms and CPA's afford much needed services to businesses of all sizes. From small business owners, to major corporations, their expertise cannot be underestimated, very during tax season.

Since organizations are required by federal, state and local governments to keep accurate and timely financial statements and reports, most businesses depend on accounting firms to prepare these documents.

In spite of this, while helping their business clients be more profitable, it's very common for CPA's to experience cash flow issues of their own, with past due accounts from some of their delinquent business customers. This is very true during the very hectic and busy tax season. That being the case, CPA's can greatly advance their cash flow by hiring outside collection agencies.

The Depreciating Value Of Money Over Time

As a CPA, you're very aware that past due, uncollected money from services already rendered decrease in value as more time passes. In addition to spending valuable time, resources and additional staff going after unpaid accounts, it also means this critical time is taken away from acquiring new business.

And it costs demonstrably more in marketing and advertising dollars to acquire new clients, than it does to collect from your non-performing receivables.

Outsourcing non-paying receivables to a debt collection agency is an reasonable and smart business decision. Not only are they experts in the recovery of past due money, collection agencies have the resources, equipment, staffing, and they can do it on an economy of scale that simply can't be done internally in your business.

Any time spent on activities outside of your main competencies, is income-robbing for you.

Grow Your Profit Margin Without Acquiring New Customers

As previously stated, you know how costly it is to draw new customers. Its common knowledge that spending for advertising and marketing is necessary for businesses to acquire new customers. Nevertheless, many companies tend to see advertising as the only means to gain new customers and grow already narrow profit margins.

Businesses should not overlook the tremendous value lying dormant in their uncollected debt. Be aware also that compared to the value of your outstanding receivables, you would have to nearly double your new business volume merely to break even.

It is far less expensive, with more predictable positive results, to outsource to a debt collection agency your unpaid receivables receivable. Monies recovered here can yield much greater net profit to your accounting business. Spending capital on advertising, while ignoring your past due debt is not spending smart dollars.

Providing A Great Value-Added Benefit To Your Clients

Businesses are always looking for ways to cut costs and save money. As their accountant, you have the ability to educate your clients and show them additional ways to save, increase cash flow, thereby improving their financial bottom line.

Teaching them the importance of turning over delinquent receivables quickly when internal collection efforts prove unsuccessful, you make them see the cost savings in lost opportunity dollars, the depreciation of unpaid debt over time, not to mention the savings from reduced internal staffing and resources.

This is especially the case if you are also experiencing improvements in your own firm's cash flow and operating efficiency.By showing organizations how to increase their financial bottom line and save capital, you become a trusted advisor and consultant. This will increase your overall worth to your clients, and make you stand out in a very competitive market.

Defend Yourself: How you can Reply to Payday Loan Collection Phone calls

Defaulting on cash advance payday loans brings one proven outcome: the beginning of collection calls. Almost right away after missing a payment, a debt collector can call to collect the entire balance of your payday loan. If not successful, collectors might use rude tactics that are considered illegal. If you have unpaid payday loan debt, it is important for you know your rights as a consumer to avoid harassment from your borrowers.

A typical strategy used by payday lenders is calling the references you provided when initially acquiring the loan. Unfortunately, this might include your present employer. Understand that a debt collector could only get in touch with your employer for the following reasons: to verify your employment, business location, and whether you have medical insurance to cover a medical bill. Payday loan lenders is also able to contact your employer in order to garnish your wages should you have a judgment entered against you. Whenever a payday lender contacts you for any other reason, then they have crossed the line.

Another well known technique of collection is threatening to arrest you for check fraud. Many are easily intimidated by this threat yet really should not be. In fact, proving that you have committed check fraud is very difficult because a lender must possess evidence that you took out a payday loan without intentions to pay it back. Check fraud is almost impossible to prove, which means you will not get arrested or go to jail for your unpaid debt.

Collectors are also prohibited from using obscene and profane language when collecting your payday loan debt. They also can only call you within reasonable hours, typically between 8:00 am to 9:00 pm. If a collector calls you constantly over a short period of time, this can be considered harassing and you could take action against the debt collector.

If you would like all phone communications to stop, you need to write a Notice to Cease and Desist Communication to your payday lender or collection agency. In this document, states that you do not wish to receive phone calls regarding your debt. Explain that you also cannot be contacted at your place of employment because doing so might jeopardize your job. If you wish to be contacted by mail, request it in this document as well and provide your existing mailing address. To protect yourself, mail the document certified, "return receipt requested" so that you have evidence of its delivery. After attaining your Notice to Cease and Desist Communication letter, the debt collector can get in touch with you one last time. However, a major disadvantage of stopping collection correspondence is that you may be leaving your debtor no other choice but to take you to court for your unpaid loan.

To avoid legal trouble, the best thing you can do is talk to your debtor. Instead of ignoring or hiding from your debt collector, respond to them immediately. Talk about payment alternatives or tell them when you expect to be able to pay the cash advance loan back.

Another choice is to seek a qualified payday loan consolidation company to work on your behalf. Doing so means that instead of contacting you for repayment, your payday loan lenders will work directly with your consolidation firm for negotiations and repayment arrangements. This saves you time and effort that's brought on by collection methods if you were to deal with your cash advance lenders yourself.

Cash advance payday loans can easily trap you in their cycle and once they are able to, it is incredibly hard to get out of. It is important for you to keep in touch with your debtors and create a plan that works for you financially. Most importantly, know your rights and ensure you are protected while you get yourself out of payday loan mess.